I’m like a lot of you out there. I am an entrepreneur. Sure I am in a fun business. I publish a magazine about the MI industry. However, at the end of the day, I am a businessman. And as all businessmen know, we have a whole different set of responsibilities – running the business side of things so everyone has a positive, stable workplace to be in.Nearly 50 percent of all MMR subscribers have identified themselves as owners or executives in our industry. So this article is for you. Even if you are not an owner, this article has some information in it that could really endear you to your bosses, if you share it with them.
So without a doubt, all of you have been faced with this question. What am I going to do about the rising cost of healthcare? This year, we were faced with a 24 percent increase in our premiums, and our premium per person had already risen to $483 monthly in 2013. I guess I shouldn’t feel bad. Another friend of mine in the industry told me the other day his premiums were going up 123 percent. He was in sticker shock, to say the least.
Well, at that time, I started to tell him how we saved tens of thousands of dollars on health insurance this year. But the next day it got me to thinking that I should just go ahead share this with everyone. This is something that could really help a lot of businesses solve a very complex problem.
So let me start at the end… This year, our company has the exact same plan from Blue Cross & Blue Shield that we had last year. In 2013, we were paying $483 per person, per month. This year, that total has gone down to $186 per person per month. I can hear you guys/gals out there now, “That’s impossible!” Well it isn’t. What you have to do is to affiliate your company with a PEO.
Saying Hello to a PEO
What is a PEO? The acronym stands for “Professional Employment Organization.” What do they do? They help employers who want to outsource certain employee management tasks, such as employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development. They also can effectively “hire” a client company’s employees, thus becoming the employer of record for those workers, which can be advantageous both for tax purposes and insurance purposes.
The real key here is insurance. A PEO allows your company to become part of a much larger buying group, which, in turn, delivers lower premiums to you and your workers.
A PEO can be as involved with your company as you want them to be. Our PEO does our payroll for us. We already had great workers comp insurance, so we kept that in place.
Transitioning to a PEO is fairly seamless. The only difference your employees will notice is a different company name on their check. Your chain of command stays intact. The PEO is not there to supervise or come between you and your employees in any way.
A couple of things to look out for: Make sure your PEO is owned by an insurance broker instead of just an agent. Brokers get better pricing. Also know that a PEO charges between $75 and $95 per employee, so a little bit of your insurance savings is eaten up with those costs. Also, when you dump the payroll service you are using and let the PEO do it, you will save a bit of money there, as well; that is included in the per employee cost.
To get the process going, just Google “PEO” along with your geographic location, and you are likely to find a number of listings in your area. We interviewed five companies before we found the one that proved to be the best fit for us. They do come in all sizes. We went with a company here in Las Vegas called Aloha HR (www.alohahr.com).
So there you go… For once, this isn’t something that is too good to be true. It is a serious solution that can really help to reduce your healthcare costs. (Cue the Mormon Tabernacle Choir…)
